DXY is tearing away and EUR sinking as COVID ravages the EZ:
Oil puked and gold fell:
metals did better on baseless Chinese stimulus rumours:
Big miners too:
EM stocks do not look well again:
But junk is OK:
As the yield curve was thumped:
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GAMMA is still the only game in town:
And why not, I guess, given the pandemic has returned to Europe. Deutsche:
This morning Austria announced a nationwide lockdown from Monday after a recent dramatic spike in Covid cases. They also made it a legal requirement to get vaccinated from February 1st. Meanwhile the German health minister announced that he couldn’t rule one out after restrictions were announced yesterday for the unvaccinated. The worry would be that Austria put restrictions only on those unvaccinated as recently as Monday and have quickly accelerated these.
Today’s CoTD shows daily cases per million for a selection of large countries and regions plus interesting other countries, especially those in eastern Europe that seem to be going through an aggressive wave.
For most of the countries near the top, the spike in cases has occurred fairly rapidly over the last couple of weeks. The exception is the UK where cases have been high and steady since the summer as high vaccination rates plus high infection rates have seemingly provided some degree of herd immunity. It’s important to bear in mind that testing rates vary considerably (the UK does the most per person in the G7) and that can affect the relative rankings, but the overall trend higher is clear.
The news is hitting European markets hard this morning as fears mount that the virus and restrictions will spread across the continent again. However the curve ball might be the US. DB’s Robin Winkler has been pointing out that the vaccination rate in Austria (64%) is somewhat lower than the likes of Spain (79%), Italy (74%), France (69%), the UK (69%) and Germany (68%) but it is still higher than the US (58%).
So although all the headlines are in Europe at the moment, will the US be more vulnerable than many European countries over the course of the full winter? Recent history suggests the US have a higher bar for economic restrictions related to covid but it also has a lower vaccination rate than their European peers.
Remember, where the EUR goes, AUD always follows with an overshoot:
Written By:
David Llewellyn-Smith
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